Why MFS isn’t investing in companies that could lose millions in fines: analyst
The MFS Investment Management company said Wednesday that it was not investing in the stocks that could be subject to a fine, as the SEC is expected to impose fines on companies in the wake of its latest crackdown on insider trading.
MFS said it had invested in companies in which the SEC had previously announced fines, including one of the companies that was fined $3.7 million last week.
The company said it will not invest in companies whose financial statements are not complete.
The SEC has also issued a new rule to help companies prepare for fines.
The rule says the SEC can order firms to post quarterly financial statements that include information on the amount of assets and liabilities held by each company.
If the SEC finds that a company’s financial statements fail to reflect the amount invested in the company, it can issue a penalty of up to $5 million.
SEC officials have said they expect the companies to face a fine of $20 million or more, depending on the size of the firm and how many investors are involved.
Mfs Investment Management did not immediately respond to a request for comment.
SEC spokesman Tom Campbell said MFS is not obligated to follow the SEC’s guidance.